It is a fungus that degrades wood. Because this microbe looks like white chalk on rotting wood, it is called a white rot fungus.
When Phanerochaete eats wood, it breaks down the lignin to get at the tasty (at least to this fungus) cellulose and hemicellulose.
This fungus can break down lignin, the complex molecule which gives wood its strength.
This fungus then eats the other parts of wood: cellulose and hemicellulose which give the fungus energy to grow.